ROLL CALL: Mayor Landry, Mayor Pro Tem Gatt, Council Members Fischer, Margolis, Mutch, Staudt, Wrobel

ALSO PRESENT: Clay Pearson, City Manager

Victor Cardenas, Assistant City Manager

Tia Gronlund-Fox, Human Resource Director

Kathy Smith-Roy, Finance Director

Mr. Pearson wanted to share the progress on the State mandated Economic Vitality Incentive Program and talk about their work towards providing open government transparency information dashboards. He said Victor Cardenas had been leading the program compliance with Marina Neumaier.

Mr. Cardenas said the State Legislature and the Governor signed into law Public Act 63 which mandated three phases the City must complete in order to receive 67 percent of their revenue sharing. One was accountability and transparency which consisted of creating a citizens guide and performance dashboard. Second was to develop a consolidation of services plan and the third was to develop an employee compensation plan. He said if the City did all three things they would receive $25,000. He said it wasn’t about the amount of money the City would be receiving; it was about continuing the long tradition of being open and transparent. The State was concentrating on communities showing their unfunded liabilities. He said it encouraged communities to consolidate all the information in one place which Novi hadn’t done, it was scattered throughout the website but this brought it to one central location. He said Novi became a member of the Munetrix website; it uploaded and consolidated the last five years of fiscal reports submitted by communities. He said they had submitted it to the state and received confirmation already. He thanked Marina Neumaier from the Finance Department.

Member Mutch said he knew it was a lot of information to pull together in a short amount of time. Even with the Munetrix tool they had to make sure the information was accurate and presented properly. He knew the State put out sample data which the City adjusted in terms of the benchmarks being used. He also wanted to see the City Administration identify additional benchmarks in each category that tied into Council goals and budget targets which had been established.

Mr. Pearson said the City hosted their annual Fall for Novi event on the Civic Center grounds last Saturday. He thanked Council for their support. He said it helped them connect with the Citizens.

Shelly Thomopoulos, 425 S. Lake Drive, commented on Council Item 4, specifically a line item in the budget amendment request for a fence surrounding the sand volleyball court at Lakeshore Park. She lives directly adjacent to the eastern property line of Lakeshore Park. She said the Parks and Recreation Department recently constructed a volleyball court which was much larger than the existing one and located it directly adjacent to the deck at the rear of her house. She said there was a line on pine trees separating them but it was extremely close. She said the new court was also located on a hill so the Parks and Recreation Department determined they wanted to construct a fence to keep the volleyball inside the court. She requested that the fence that would run along her property line be a solid construction fence, the Director of Parks said he was looking at a chain link fence. She said a solid construction fence would provide a visual barrier from her deck to the volleyball court and would muffle the noise which had increased dramatically. She requested that they approve the funds for the fence and stipulate the one side of the fence be of solid construction.

Member Gatt removed Item F, to be addressed under Consent Agenda removals.

A. Approve Minutes of:

1. September 12, 2011 – Regular meeting
2. September 14, 2011 – Special meeting

B. Enter Executive Session immediately following the regular meeting of September 26, 2011 in the Council Annex for the purpose of discussing pending litigation, property acquisition and privileged correspondence from legal counsel.

C. Approval of the 2012 Suburban Mobility Authority for Regional Transportation (S.M.A.R.T.) Municipal Credit Fund Resolution and Contract in the amount of $54,454.

D. Approval of transfer of ownership of escrowed 2011 Class C Licensed Business with Dance-Entertainment permit, located at 42050 Grand River, Novi, MI 48375, Oakland County, from Grand River Avenue Restaurant Inc., Jamma Associates, Inc. – Receiver to Jamma Associates, Inc.

E. Approval to set a Public Hearing Date on October 24, 2011 for the 2012 Community Development Block Grant Program.

G. Approval to award a services contract for Light Duty Fleet Preventive Maintenance Services to A & D Wixom Auto Services for an estimated annual amount of $10,677.

H. Approval of final payment to H2O Irrigation, Inc. for the Fuerst Park Irrigation Improvements project in the amount of $9,374.21.

I. Approval to award a contract for design engineering services for the 2012 Pathway Gap and ADA Compliance Annual Implementation to Spalding DeDecker Associates, Inc. for the design fee of $19,798.

J. Approval to award a contract for Underground Irrigation System Upgrade at ITC Community Sports Park to American Sprinkler & Landscape, Inc., the low bidder, in the amount of $51,821.

K. Approval of Change Order No. 3 to Hard Rock Concrete for the 2010 Neighborhood Road Program (Concrete) for additional concrete panel replacement in various locations, in the amount of $79,713.

L. Approval to amend contract with Berkshire Development for Court Ordered Demolition of structure located at 28060 Dixon Road to include abatement necessitated by the discovery of a leaking underground heating oil tank during the demolition process for a total cost not to exceed $23,000.

M. Approval for Release of Premises Liability Agreement with the Michigan State Police (MSP) that would allow MSP to use the Novi Police Headquarters as a detachment facility.

N. Adoption of Resolution to Amend the VantageCare Retirement Health Savings (RHS) Program to include the Police Clerks (effective for police clerk new-hires after October 1, 2011).

O. Adoption of MERS 2010 Restated Uniform Defined Contribution Program Resolution for the Police Clerks – General Union Division 10 (effective for police clerk new-hires after October 1, 2011).

P. Approval of Acceptance of Easements for Water Main Improvements on Pontiac Trail from Occidental Development, LLC and Edward Rose Realty, Inc. (Portsmouth/Springs Apartments), Parcel Nos. 22-04-100-034, 22-04-200-013, and 22-04-100-010.

Q. Acceptance of transfer from the General Fund to the Retiree Health Care Fund in the amount of $100,000 for additional pension contributions to reduce the City’s unfunded accrued liability.

R. Approval of Claims and Accounts – Warrant No. 852

1. Approval of Resolution to amend the City’s Fund Balance/Reserve policy to include certain Special Revenue Funds and the Capital Replacement Reserve policy for the Enterprise Funds (in addition to the General Fund-Fund Balance policy).

   Mr. Pearson said they made adjustments in the text after the First Reading.

   Member Staudt said he could support the resolution with the adopted changes. He would, however, like to see the language be consistent throughout. He would like to see the policy state that the General Fund minimum would be between 18 – 22 percent as opposed to the current language without the word minimum. He made a motion to approve the City’s Fund Balance/Reserve policy to include certain Special Revenue Funds and the Capital Replacement Reserve policy for the Enterprise Funds with the addition to adding the word minimum in the appropriate spot.

   CM-11-09-139 Moved by Staudt, seconded by Gatt; MOTION CARRIED: 6 – 1

   To approve the Resolution to amend the City’s Fund Balance/Reserve policy to include certain Special Revenue Funds and the Capital Replacement Reserve policy for the Enterprise Funds (in addition to the General Fund-Fund Balance policy) with the addition of the following language: an amount that represents a minimum of 18 – 22 percent of budget expenditures. In the event that Council’s circumstances required use of Fund Balance a plan would be put in place to replenish it within the following fiscal year.

   Member Margolis asked about the differences in the amount between the funds.

   Mr. Pearson asked Ms. Smith-Roy to discuss the differences between the funds. He said it was a targeted range that provided a minimum. He said they came in at or above that level consistently, it was a policy matter and guidance for putting together the budget.

   Ms. Smith-Roy said they didn’t include the word minimum in the General Fund because if a liability or significant expenditure came up during the year the General Fund was the most logical source to use. They used that terminology in the Special Revenue Funds because those funds were already restricted by the type of fund they were. She said if they were going to include that language they might also want to consider including how they would replenish the fund back to the minimum in case something catastrophic happened.

   Member Margolis said that was why she found the word approximately interesting. She asked Ms. Smith-Roy to expand on the discussion about replenishing because it would also apply to the other funds. She asked if by adding the word minimum they were stating that they would never go below 18 percent.

   Ms. Smith-Roy said that was what it applied. She said they measured the General Fund fund balance at different points throughout the year. She said their thought process was that it could fall below that amount. Whereas in the Special Revenue Funds, while it was connected somewhat to operations, the funds were so restricted it wasn’t the go to place in case something catastrophic happened.

   Member Margolis asked to confirm that Ms. Smith-Roy’s concern about adding the word minimum was if something catastrophic happened like a natural disaster, by putting the word minimum, the City would be in violation of their policy versus just having a range they would not be in violation of the policy.

   Ms. Smith-Roy said that was the thought process because it was a target and if it fell below that point they could present to City Council a range that was lower in the future. Ms. Smith-Roy said it currently stated "an amount that represents approximately". They would remove that and instead say maintained at a minimum.

   Member Margolis wanted to clarify what the motion would state. For the General Fund they would be stating the reserve would remain at a minimum of 18 percent and would take out the language "an amount that represents approximately".

   Member Staudt said it would state, maintained at an amount that represents a minimum of 18 – 22 percent, the word approximately would be removed. He said his biggest issue wasn’t to set a minimum; it was to make sure it was a minimum range as discussed in goal setting.

   Member Margolis said the concern wasn’t about setting an amount as a minimum, the Fund Balance was there for a catastrophic reason and the concern was putting minimum in the language.

   Mr. Pearson said if for any reason the amount dropped below the minimum there could be an adoption of a plan to replace the funds.

   Member Margolis said policy wasn’t something to play with; every possible ramification had to be thought through. She said what was being suggested was if funds fell below the minimum of 18 – 22 percent the replenishment would then be decided.

   Mr. Pearson said he was suggesting a plan be put into place so if during the course of the year circumstances dictated anything below the range then at that time there would also be a simultaneous plan for replenishing it.

   Member Margolis said she would be much more comfortable with that.

   Member Margolis asked Member Staudt to consider a friendly amendment to the motion to state "an amount that represents a minimum of 18 – 22 percent of budget expenditures. In the event that Council’s circumstances required use of Fund Balance a plan would be put in place to replenish it within the following fiscal year."

   Member Staudt and Member Gatt both accepted the friendly amendment.

   Member Margolis said she would support it because she thought they needed the policies in place. She believed that they shouldn’t hoard money that the tax payers were paying now for services they expected now. She said although they should put a reasonable amount away to be careful for a rainy day, to hoard money away continuously meant that she was paying money now but her roads weren’t being fixed. The City was saving her money rather than spending it on the services that she needed.

   Member Fischer said part of the General Fund Balance talked about providing cash to finance expenditures from the beginning of the budget year until property taxes were collected. He said in doing so they wanted to avoid short term borrowing costs if they needed cash. He asked Ms. Smith-Roy if she were to measure the balance on a monthly basis, would she drop below the 18 percent minimum being proposed.

   Ms. Smith-Roy said technically the Fund Balance was reported based on the budget. She said they reported their property tax revenue on July 1. In theory, they wouldn’t drop below.

   Member Fischer said he could support the item with the proposed amendments.

   Member Mutch said they had actual language in the policy that stated, "In the event the level of expenditure exceeds the estimated appropriation, the City will create a plan to replenish fund balance/reserves within three years by controlling operating expenditures, adjusting operating and/or dedication excess or special revenue sources." In reading that, he thought there was already language in the policy that replenished the funds. He asked how the motion operated differently than what was already in the policy and was the new language necessary. He thought the language that existed was sufficient.

   Mayor Landry said he wouldn’t support it because he didn’t think fund balance should exceed 22 percent. He said if the language minimum of 18 – 22 percent was added when it came time to budget the argument would be made that the policy stated a minimum of 18 – 22 percent. He said he respected those who thought they should keep more than 22 percent but he disagreed with it. He agreed with the policy that if people paid taxes, the City should be prudent and have a rainy day fund with a limit. The money should be spent on things for the residents who paid the taxes. He said this policy was only important at budget time. He said the administrations track record at the end of the year was a fund balance of more than 22 percent anyways because the administration spends less than they’re allocated.

   Roll call vote on CM-11-09-139 Yeas: Margolis, Mutch, Staudt, Wrobel, Gatt, Fischer

   Nays: Landry

2. Approval of Resolution to comply with Senate Bill 7 Publicly Funded Health Insurance Contribution Act by adopting the 80/20 cost sharing model set forth in Section 4 of that Act.

   Mr. Pearson said the legislature passed Senate Bill 7 which discussed employee health care costs. He said the legislature adopted an approach that required local government to select one of four options. The default option was a hard cap of cost expenditures but there were other options that included an 80/20 cost sharing model, an opt out solution or to ignore the legislation. He said they recommended Council adopt the resolution for the 80/20 cost sharing. They put a lot of thought and consideration into the decision knowing the impact on employees while trying to keep in mind the balancing of costs. He said the 80/20 was consistent with how the City approached negotiations and administrative healthcare costs. He thought the hard cap option would be more difficult to administer, it had more implications for equity in terms of the amounts different people would pay. He said the Governor hadn’t signed the Bill yet but all implications were that he would any day now. He said if anything changed the resolution would not go into effect, they would come back with a new plan. To allow the employees maximum time to consider options and to allow the City to develop healthcare plan options they thought it was important to get this to Council now.

   Mayor Pro Tem Gatt said he read all the options and he agreed this was the most prudent way to go. He said they had to keep in mind that they just ratified the contract with the Police Clerk’s union where they agreed to pay 20% of their healthcare premiums starting in 2013. He said it was a way for the City to save money and to ultimately save jobs.

   CM-11-09-140 Moved by Gatt, seconded by Staudt; MOTION CARRIED: 6 – 1

   To approve the Resolution to comply with Senate Bill 7 Publicly Funded Health Insurance Contribution Act by adopting the 80/20 cost sharing model set forth in Section 4 of that Act

   Member Margolis asked if the act had any application to retiree healthcare.

   Mr. Pearson confirmed it did not, it only affected active employees.

   Member Margolis said in some of the materials it talked about all contributions for healthcare including premiums, co-pays, flex-spending accounts and health savings accounts. She said from what she saw the calculations they were given only spoke to the healthcare premiums. She asked how the calculations worked if they included health savings, the City also contributed to the retiree’s health savings accounts.

   Ms. Gronlund-Fox said it would be separate because it had nothing to do with retirees. However, the priority health high deductible plan had contributions made to a health saving account and they were taken into consideration.

   Member Margolis asked for confirmation that the money the City contributed for current employee’s retiree health savings was not included.

   Ms. Gronlund-Fox confirmed the money being contributed into current employee’s retiree health savings accounts was not in the calculation.

   Member Margolis said from the charts they were given, she saw 37 employees on Community Blue or Traditional Blue Cross. There was some discussion on if employees would be encouraged to move to the lower cost health plans if the City went with the hard cap. She said if those 37 people moved to the lower cost HAP plan, employee contributions under hard cap would be approximately $257,000 and under the 80/20 would be $500,000. So if everyone moved to a lower healthcare plan, the City would save more money under the 80/20 than the hard cap.

   Ms. Smith-Roy said that would be correct. She said the calculation was for the groups that would be affected by the 80/20 percent, not the entire City. She said the higher amount was in large part due to the premium adjustment. She said it didn’t consider their experience with Blue Cross Rates which may go up depending on the amount of people in them.

   Member Margolis said she would support the motion.

   Member Mutch said he wouldn’t support the proposal. He said the biggest problem he had with the 80/20 approach was the differential he saw in the healthcare plans. A single administrative employee who chose a priority health plan cost the City $4,100, if they chose HAP it was $4,700 and Community Blue was approximately $6,500. If the same employee had to choose a family plan the priority health plan was $10,200, the HAP plan was $12,240 and the Community Blue plan was $19,600. He said the range could vary from $2,400 for a single person to up to over $9,000 for a family plan. He said that was a significant differential between two people doing the same job. He said Community Blue was a great plan and they were fortunate to be able to offer it to the employees but he had to ask if it was fair and equitable to have 2 similarly situated employees being given benefits that were so disparate. Even with the higher employee contribution for the Community Blue plan, they were not offsetting the gap between the lower cost plans. He said if it was approved he would want to see the City look at moving away from the Community Blue One Plan to a lower cost Community Blue plan. From a cost perspective he didn’t think they could continue to justify it going forward even with the 80/20 plan. He said that plan generally benefited people further up the wage scale because of the premium costs that went with it. He said when employees saw that the premium would only cost them $20 more per pay period they might move to the higher cost plan. He said the hard cap option wasn’t perfect either but it put everyone on the same level playing field and it was an equitable amount.

   Member Staudt said the State Legislature had a lot of pressure on them to close the gap between public and private benefits, they chose some less than desirable positions on some things. He said the 80/20 plan was what most tax payers wanted. There was a large gap between what private employees were paying and what government employees paid. He would have preferred the legislature to go 80/20 across the board but it was now the decision of the local government. He said he would support the 80/20 option.

   Member Wrobel said he would also be supporting the 80/20 cap. He said being in the private sector; they had dealt with it for a number of years. He said he would rather increase the cost of healthcare to the employees and be able to keep more jobs.

   Roll call vote on CM-11-09-140 Yeas: Staudt, Wrobel, Landry, Gatt, Fischer, Margolis

   Nays: Mutch

3. Consideration of Zoning Ordinance Text Amendment 18.252 to update the Novi Site Plan and Development Manual in its entirety and to amend the City of Novi Zoning Ordinance at Article 25, "General Provisions," Section 2516 "Site Plan Review (All Districts)" in order to update the existing Novi Site Plan and Development Manual.　 First Reading

   Mr. Pearson said this had been a lot of hard work on the part of staff and the Planning Commission. He said it was a comprehensive update of the site plan review manual.

   Member Margolis said they did a great job in terms of making these things more accessible. She said they less often heard that Novi was a tough place to do business and get things done.

   CM-11-09-141 Moved by Margolis, seconded by Staudt; CARRIED UNANIMOUSLY:

   To approve the Zoning Ordinance Text Amendment 18.252 to update the Novi Site Plan and Development Manual in its entirety and to amend the City of Novi Zoning Ordinance at Article 25, "General Provisions," Section 2516 "Site Plan Review (All Districts)" in order to update the existing Novi Site Plan and Development Manual.　 First Reading

   Member Wrobel said he would support it also, anything to help people come to Novi rather than a surrounding community.

   Mayor Landry echoed the comments of Member Margolis. He remembered when people said how tough it was to develop in Novi but they couldn’t say that any longer. He said it was very easy to follow.

   Roll call vote on CM-11-09-141 Yeas: Staudt, Wrobel, Landry, Gatt, Fischer, Margolis, Mutch

   Nays: None

4. Approval of Resolution to authorize Budget Amendment #2012-1.

Member Staudt agreed with the comments of the speaker earlier this evening to look at some alternatives to the fencing options.

Member Mutch said that additional landscaping might be an alternative. The intensity of the use at that location increased which was good from a facilities perspective but they wanted to be cognizant of the impact of it on the neighbors.

Member Wrobel said he would support the motion. He wanted to make sure the City Parks Administration worked closely to make sure the noise level didn’t get out of hand.

Member Fischer said they had several street renaming’s in the last year since they discussed honorary street names. He said it came to his attention that they didn’t have a policy for nominations, a technical review to see if the street name was similar to others in the City. There wasn’t any objective criterion to decide whether it was appropriate to name or rename a street after someone. He said he was looking to refer it to staff and/or Ordinance Review. Some members of Council said they wouldn’t support any other street renaming’s, he was of that opinion. He saw two options, a policy discussion by Council or a referral to staff and Ordinance Review.

Mayor Pro Tem Gatt said he had been on Council for eight years and in those eight years they only had two instances where Council discussed renaming a street. One was driven by administration and one was driven by himself. He said he didn’t see it as a problem, he just didn’t think any committees or staff should spend too much time talking about it. He said if it ever came up again and Council thought it was right they would act on it then. He said he didn’t support moving it forward in any way, shape or form.

Member Margolis thought they should take a look at it because they did two in the past year which opened up a door. She said they would have a tough time making decisions or coming up with answers as to why they would name a street now but not later. She said the Council had been very good about setting very objective criteria and policy, personally she thought that was how they needed to go.

Member Wrobel initially thought it would be a good idea to look at a policy but after the last Council meeting he had time to think about how many streets he remembered being renamed since he’d been in Novi. He could only come up with three which he didn’t feel was a lot. He said thinking about policies, they would be very subjective and it would be a difficult policy to write. He didn’t want to bother staff or the Ordinance Review Committee with smaller items.

Mayor Landry asked Mr. Pearson when Council addressed this issue before if it was only for honorary streets.

Mr. Pearson said it was about a year and a half ago that they developed some background information from other Cities that did honorary street names. He thought they only looked at honorary street names.

Member Fischer understood they didn’t want to look at it because it would be a difficult policy to write. He didn’t think Council had ever shied away because a policy was difficult to write. He said right now anyone could walk into the City and request that a street be renamed. Depending on whom it was they might be referred to the Building Department for possible consideration by Council or not considered at all. The City had no direction on what to do if a citizen of Novi wanted to have a street renamed. He said a few months ago it seemed that administration was driving to rename a street and recently, it seemed to be an election year, and there was another street renaming before them. He said that concerned him.

Mayor Pro Tem Gatt said he made a motion to honor Lee BeGole because his term on Council was coming to an end. Whether he was elected to be Mayor or not remained to be seen. Lee BeGole was an iconic figure in Novi. He took offense to the demeaning comment made. He wouldn’t support the motion. He didn’t think any Council was afraid of a policy; it was a policy that was impossible. He said a developer could come in and name a street after anyone. He said when the Council who was sitting there was faced with the question, that Council would know whether the renaming was right or wrong. He said they had other organizations ask them to name a street after a great guru in India and they didn’t discuss it. The Council will know what to do; it wasn’t a matter of it being an election year. He said Lee BeGole was the most deserving character of anybody in the entire City that was still alive. He said Lee BeGole deserved to have a street named after him and to bring politics into it was classless.

Member Wrobel asked over the past few years how many requests had there been to rename streets.

Mr. Pearson said these were renaming’s of existing streets. He said it had come up four times that he could think of.

Member Margolis said what just happened was an example of why they needed a policy; it could be very emotional because people cared about people in their lives. She said they had a policy in place for the past several years stating they didn’t name honorary street names. She said from the beginning she didn’t want to get involved with honorary street names but now that they had they needed to look at it and decide. She said they should make sure it was being done in an objective fashion.

Mayor Landry said he didn’t think there was harm in discussing a possible policy. He said they didn’t want to be involved in honorary street names, having two names for the same street. He said he would have no problem with somebody looking at a possibility of a renaming policy Council could vote it up or down.

Mayor Pro Tem Gatt said as a member of the SWOCC Commission this came up at the last meeting, he voted no at the time and wanted to be consistent with the vote. He said the SWOCC Commission was moving to eliminate the Executive Directors position, he didn’t feel it was necessary or warranted.

Member Mutch said he wasn’t comfortable voting for the item either based on the information they had. He didn’t have a lot of feedback from the group to know what was driving this. He said part of the impression he got was that it was driven as much by personality issues as it was by operational issues. Setting that aside, his biggest concern from the City perspective was some language contained in the modified agreement, specifically Article IV Section 8. He said it talked about devolving a number of SWOCC duties back onto the member communities. He said the reason they were in a partnership with Farmington and Farmington Hills was to have an entity that operated for the benefit of all three communities. From the perspective of SWOCC operations, if they didn’t have the funds to employ their executive director his concern was that it was being pushed back onto the communities. He said it wasn’t clear who was in charge at SWOCC now, whether it would be the board or a person. Without additional information he wasn’t comfortable going down that path and wouldn’t support the motion.

Mr. Pearson said this piece was for the member communities. The SWOCC board made the decision that they could and needed to operate without the exact position. He said the operations there had declined; communities retained more of the money. They went from ten full time employees and an executive director down to five. The Boards decision as a whole was that they could operate without it.

Mayor Landry said he would support the motion because with five employees he didn’t think they needed an executive director, they could take direction from the board.

There being no further business to come before Council, the meeting was adjourned at 8:06 P.M.

________________________________ ________________________________

David Landry, Mayor                         Cortney Hanson, Deputy City Clerk

________________________________ Date approved: October 17, 2011

Transcribed by Natalie Laitinen